Betclic Everest to go public in SPAC merger alongside TV business Banijay

Betclic Everest Group and television production business Banijay will together go public on Euronext Amsterdam through a special-purpose acquisition company (SPAC) merger.

Betclic Everest will first join with Banijay to create FL Entertainment. This combined business, with an enterprise value of €7.2bn (€6.2bn/$7.5bn), will generate revenue of €3.5bn and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of €609m.

The vast majority of that total will come from TV giant Banijay, which is responsible for shows including Peaky Blinders, Big Brother, Deal or No Deal and Fort Boyard, with Betclic Everest’s revenue coming to €741m in 2021, up 64% from 2020.

FL Entertainment will then itself combine with Pegasus Entrepreneurial Acquisition Company Europe, which is already listed on Euronext Amsterdam.

The deal will include all Betclic Everest subsidiaries, including bet-at-home, which is currently listed on the Xetra stock exchange in Frankfurt.

Pegasus has already secured €220m in private investment in public equity (PIPE) funding, plus €250m in additional funding from controlling shareholder Financière Lov, €50m from Financière Agache and Tikehau Capital and €100m raised via non-redemption commitments.

The SPAC plans to gain more PIPE funding, targeting an additional €250m.

Pegasus said that the additional funding would help Betclic “attract new players by innovation in the offers made to players and improvement of its user experience, as well as to invest in customer relation management to retain players and improve their loyalty”.

Through this, Pegasus said it expects Betclic’s player base to increase by 18% in 2022, from 893,000 monthly average players to more than 1 million.

Banijay chairman Stéphane Courbit will be the chairman of the new business, while Financière Lov chief executive François Riahi will become its CEO.

“Achieving a public listing of FL Entertainment through this partnership with Pegasus Entrepreneurs is a milestone in the history of our group,” Courbit said. “As a result of the transaction, the group will benefit from a robust balance sheet and will be very well positioned to capture growth in the entertainment industry.

“One of the key strengths of FL Entertainment is its management team: François Riahi as CEO of FL Entertainment, Marco Bassetti as CEO of the Banijay Group and Nicolas Béraud as CEO of the Betclic Everest Group.

“Both Marco and Nicolas have developed their businesses with tremendous success so far and will continue to do so in the new structure, supported by a talented team.”

Monte Carlo Casino owner SBM International – the largest shareholder of Betclic Everest – will own 10% of the new business and appoint one member to its board.

Pierre Cuilleret, sponsor and CEO of Pegasus Entrepreneurs, will join the board of the business post-merger.

“Pegasus Entrepreneurs was created by long-term investors with the objective of partnering with an entrepreneur-led European company with a track-record of achieving profitable growth, and the potential to accelerate growth and create value with access to our expertise, network and listing platform,” he said. “We could not dream of a better opportunity than partnering with FL Entertainment and Stéphane Courbit to achieve our objective on behalf of our shareholders.

“The proposed business combination with FL Entertainment benefits from strong support from our shareholders and investors, as evidenced by unprecedented level of non-redemption commitments already received, as well as the largest ever PIPE raising by a European-listed SPAC. We look forward to the next stage of FL Entertainment’s growth and value creation.”

Advisory business Regulus partners noted that the timing made sense for a SPAC merger, but that an additional gaming operator may need to be acquired to complete the business.

“Betclic has chosen a good time to SPAC,” Regulus said. “French and Portuguese markets have shown very strong adoption growth during Covid, while the highly restrictive markets of Germany and Poland provide an underpin of share as well as segment growth.”

Regulus did note that Betclic’s experience in UK – ultimately exiting in 2019 – Italy and Sweden demonstrated a less effective business model in competitive markets. This, it warned, may restrict growth opportunities.

“This is where the scale of Banijay within the SPAC probably matters to the gambling sector: the acquisition of a strong omnichannel operator and/or an online business with proven competitive capabilities would round out the business and mitigate these risks nicely and the combination has the scale to achieve this.”

Author: Raymond Fleming